BILL ANALYSIS Ó
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 115
Gloria Negrete McLeod, Chair Hearing date: May 2, 2011
SB 115 (Strickland) as amended 4/13/11 FISCAL: YES
PUBLIC OFFICER AND PUBLIC EMPLOYEE FORFEITURE OF PENSIONS FOR
CONVICTION OF ANY FELONY WHILE PERFORMING OFFICIAL DUTIES
HISTORY :
Sponsor: Author
Prior legislation: AB 1858 (Jeffries), 2008
Failed passage in Assembly PER&SS Committee
AB 1044, (Aghazarian)
Chapter 322, Statutes of 2005
SB 1206, (Soto)
Chapter 466, Statutes of 2004
SUMMARY :
Would require a public officer or employee convicted of a
specified felony for conduct arising directly out of his or
her official duties on or after January 1, 2012, to forfeit
all rights, benefits and membership in any public retirement
system in which he or she is a member as of the date of
conviction.
BACKGROUND AND ANALYSIS :
1)Existing law :
a) provides that retirement, death and disability
benefits also extend to a member's dependents;
b) allows the Board of the California Public Employees'
Retirement System (CalPERS) to suspend benefits of a
state member upon indictment for the commission of, or
conspiracy to commit, certain enumerated felonies
arising directly out of his or her official duties, when
that member is a fugitive from justice;
Michael Bolden
Date: 4/27/11 Page 1
c) allows the member who has had benefits suspended, to
withdraw his or her accumulated contributions from the
system thereby terminating membership in the relevant
system;
d) requires the forfeiture of all rights and benefits,
and termination of membership in any public retirement
system, by elected or reelected public officers, as
specified, convicted of certain enumerated felonies;
e) allows an elected public officer to maintain his or
her rights, benefits and membership under any public
retirement system, if the governing body of an elected
public officer's employer, as specified, authorizes the
public officer to receive those rights and benefits;
f) allows a judge to order restitution, repayment or
other penalty when an individual is convicted of a
crime;
g) provides that a judge who pleads guilty or no contest
to, or is found guilty of, a crime punishable as a
felony under California or federal law involving either
moral turpitude (an act violating the moral standards of
the community) or that was committed in the course and
scope of the judge's duties, forfeits all benefits under
the Judges' Retirement System except that his or her
accumulated contributions are returned, and
h) authorizes county boards of retirement to recalculate
the benefit of a member's retirement to recover
overpayments caused by fraudulent reports overstating
the member's final compensation or other fraudulent
actions taken to increase a retirement benefit.
1)This bill would :
a) apply to a public officer, or public employee as
defined, who is a member of the California Public
Employees' Retirement System (CalPERS), California State
Teachers' Retirement System (CalSTRS), '1937 Act County
Retirement, or independent retirement Systems;
Michael Bolden
Date: 4/27/11 Page 2
b) add specified felonies for which an elected or
reelected public officer could lose benefits and make
those changes effective for duties occurring on or after
January 1, 2012, and eliminate the requirement that a
convicted elected public officer lose membership in a
public retirement system;
c) provide that a public officer or public employee, as
defined, who is convicted of a felony, as specified,
arising out of his or her official duties, must forfeit
that portion of his or her rights and benefits that
accrued on or after January 1, 2012;
d) provide that contributions made by the public officer
or public employee during the term of office must be
returned to the public officer or public employee
without interest;
e) require that the public officer's or public
employee's employer notify the retirement system of
which he or she is a member of the conviction;
f) define "public officer" as an officer of the state,
or an officer of county, city, city and county,
district, or authority, or any department, division,
bureau, board, commission, agency, or instrumentality of
any of these entities, and
g) define "public employee" as any person employed by
any public agency.
COMMENTS :
1)Would this Bill Abrogate Community Property Rights ?
Retirement, death and disability benefits also extend to a
public emloyee's dependents. This bill may be construed to
abrogate the rights of an innocent spouse or dependent who
was not involved in the commission of any criminal activity
by the public officer or public employee.
According to the Executive Committee of the Family Law
Michael Bolden
Date: 4/27/11 Page 3
Section (FLEXCOM) of the California State Bar, which has
provided technical comments only:
"Because pension benefits can be divided as community
property, a forfeiture of those benefits (as under this
bill and existing Government Code Section 1244) may
result in adverse economic consequences to a
non-employee (alternate payee) former spouse of a
CalPERS participant."
FLEXCOM also noted that this measure is silent on the
impact of a variety of community property issues that can
arise when the employee spouse is required to forfeit his
or her pension benefits, or in the event of legal
separation or dissolution of marriage.
2)The Payments of Retirement Benefits - The City of Bell
After an audit by CalPERS into the compensation set for a
number of City of Bell positions, including those of the
City's former Chief Administrative Officer, Assistant Chief
Administrative Officer and Chief of Police, CalPERS stated
that it was not going to pay pensions based on the City of
Bell's reported compensation levels.
CalPERS' audit concluded that the City of Bell did not
provide the information necessary to determine retirement
benefits, reportable compensation and enrollment in the
retirement and health systems for certain employees,
including:
Pay rates reported by the City of Bell failed to
qualify as compensation earnable for pension purposes;
Non-reportable special compensation such as employer
payments to a deferred compensation program were
incorrectly reported to the pension fund as compensation
earnable, and
The City failed to complete and submit membership
forms to CalPERS to properly establish membership for
certain elected officials' positions and failed to
report earnings and submit retirement contributions on
behalf of certain temporary/part-time employees who
qualified to become members of CalPERS.
Michael Bolden
Date: 4/27/11 Page 4
A copy of the CalPERS City of Bell audit is available
online at:
http://www.calpers.ca.gov/eip-docs/employer/er-forms-pubs/pu
bs/compliance-reviews/city-of-bell.pdf
1)Arguments in Support
According to the author:
"Public employees, like elected officials, should not be
allowed to violate the public's trust and use precious
taxpayer dollars for their own personal benefit. The
recent allegations of corruption in the City of Bell
highlight the need for this bill. Several employees of
the City received outrageous salaries and, as a result,
will receive huge pensions even if they are convicted.
It is an outrage that taxpayers will have to pay for
these lifetime benefits despite the fact that they were
the ones harmed."
2)Arguments in Opposition
According to the California Professional Firefighters and
others, this measure:
"Confiscates a person's vested property right in
addition to any punishment provided for under the Penal
Code." In addition, the measure discriminates against
public employees while no such similar penalty exists
for a private employee, and the bill may violate Due
Process and the Equal Protections Clauses of the United
States Constitution. Finally, opponents assert that
"the real harm in pension forfeiture would be to the
innocent spouse and family of the convicted officer who
will lose their financial security" and "deprives the
crime victim of a potential source of restitution."
5) SUPPORT :
Howard Jarvis Taxpayers Association (HJTA)
Los Angeles County District Attorney's Office, Support if
Michael Bolden
Date: 4/27/11 Page 5
amended
6) OPPOSITION :
American Federation of State, County and Municipal
Employees (AFSCME), AFL-CIO
Association of California State Supervisors (ACSS)
Association of California Water Agencies (ACWA), Oppose
unless amended
Association of Orange County Deputy Sheriffs (AOCDS)
California Correctional Peace Officers Association (CCPOA)
California Fraternal Order of Police (CFOP)
California Professional Firefighters (CPF)
California School Employees Association, AFL-CIO
California State Employees Association (CSEA)
Long Beach Police Officers Association (LBPOA)
Los Angeles County Professional Peace Officers Association
(LACPPOA)
Santa Ana Police Officers Association (SAPOA)
Service Employees International Union (SEIU)
Service Employees International Union, Local 1000 (SEIU)
#####
Michael Bolden
Date: 4/27/11 Page 6